10-Q: Beyond Air Narrows Losses, Boosts Revenue Amid Strategic Funding

Beyond Air, Inc. reported significantly reduced net losses and increased revenue for the six months ended September 30, 2025, driven by LungFit PH commercialization and recent capital raises.

Summary

• Net loss attributable to Beyond Air, Inc. decreased to $15.6 million for the six months ended September 30, 2025, from $25.6 million in the prior year period.
• Revenues for the six months ended September 30, 2025, more than doubled to $3.6 million, up from $1.5 million in the same period last year.
• Gross loss significantly narrowed to $0.1 million for the six months ended September 30, 2025, compared to $1.4 million in the prior year.
• Operating expenses decreased substantially, with Research and Development down by $5.1 million to $5.5 million and Selling, General and Administrative down by $4.8 million to $9.6 million for the six months ended September 30, 2025.
• Cash, cash equivalents, and marketable securities increased to $10.7 million as of September 30, 2025, from $7.1 million as of March 31, 2025.
• The company used $9.0 million in operating activities for the six months ended September 30, 2025, a significant reduction from $23.5 million in the prior year period.
• Beyond Air completed several financing activities, including raising $8.1 million from an At-The-Market (ATM) equity offering and $2.9 million from warrant exercises, and secured a new $12.0 million secured promissory note and an equity purchase agreement for up to $20.0 million with Streeterville Capital LLC post-period end.

Sentiment

Score: 6

Explanation: The company demonstrated significant improvements in revenue growth and reduced net losses and cash burn, indicating positive operational momentum. However, the persistent 'going concern' warning, the need for continuous capital raises, and the pausing of a key clinical trial temper the overall sentiment, suggesting ongoing financial fragility despite progress.

Positives

• Revenue more than doubled for the six months ended September 30, 2025, reaching $3.6 million, indicating growing commercial traction for LungFit PH.
• Gross loss significantly reduced from $1.4 million to $0.1 million, demonstrating improved operational efficiency and sales growth.
• Net loss attributable to Beyond Air, Inc. decreased by approximately 39% to $15.6 million, reflecting better cost management and increased revenue.
• Operating expenses, including R&D and SG&A, saw substantial reductions, contributing to the narrowed net loss.
• Cash, cash equivalents, and marketable securities increased to $10.7 million, improving the company's liquidity position.
• The LungFit PH system received European CE mark approval and regulatory approvals in several Asian and Oceanic countries, expanding its market reach.
• Beyond Cancer's UNO program for solid tumors is progressing with a Phase 1 human clinical trial and a Phase 1b combination trial protocol approved by the Israeli Ministry of Health.
• NeuroNOS, the neurology affiliate, successfully raised $2.5 million in private placements to advance its nNOS inhibitor program for neurological conditions.
• Positive interim data from the NTM lung disease clinical trial showed the high dose NO treatment was well-tolerated and demonstrated improvements in quality of life and trends in microbial load reduction.

Negatives

• The company continues to incur net losses, with an accumulated deficit of $302.0 million as of September 30, 2025.
• Management has identified substantial doubt about the company's ability to meet its obligations with cash on hand, requiring additional funding within one year.
• The U.S. clinical trial for LungFit PRO in Viral Community-Acquired Pneumonia (VCAP) has been paused pending future funding.
• The company is subject to SEC 'baby shelf rules,' limiting its ability to sell shares through its ATM offering to $0 million as of September 30, 2025, due to its public float being less than $75.0 million.
• Total stockholders' equity decreased from $14.3 million as of March 31, 2025, to $13.1 million as of September 30, 2025.

Risks

• Substantial doubt exists about the company's ability to meet its obligations with current cash on hand, necessitating additional funding within one year.
• Future capital needs and the adequacy of available funds are highly dependent on the success and costs of product commercialization, preclinical studies, clinical trials, and regulatory approvals.
• Financing may not be available on acceptable terms, or at all, which could materially adversely affect strategic objectives, results of operations, and financial condition.
• The company is subject to risks common to development and early-stage medical device companies, including new technological innovations, regulatory approval uncertainties, dependence on key personnel, protection of proprietary technology, compliance with government regulations, and product liability.
• Reliance on third-party and single-source suppliers for materials poses a risk to manufacturing and supply chain stability.
• There is no assurance that products beyond LungFit PH in the U.S. will receive required regulatory approvals or clearances, or that approved products will achieve market acceptance.
• The company's public float being less than $75.0 million restricts its ability to raise capital through its Form S-3 registration statement, including the ATM offering, due to SEC 'baby shelf rules'.

Future Outlook

The company expects to incur net losses and have significant cash outflows for at least the next year, requiring additional funding within one year. Management is confident that ongoing financing efforts will enable it to meet obligations. The nNOS inhibitor program for neurological conditions is expected to progress to a Phase 1 first-in-human clinical trial by the end of 2026. Significant revenue contributions are anticipated in fiscal 2026 and beyond from LungFit PH partnerships. Discussions with the FDA for the NTM program are expected in calendar 2026. The COPD program will advance subject to additional financing.

Management Comments

• Management is confident that the efforts to arrange financing, while not assured, will enable the Company to meet its obligations.
• We expect this program [nNOS for ASD] to progress from preclinical to a phase 1 first-in-human clinical trial by the end of 2026.
• We anticipate significant contribution to revenues in fiscal 2026 and beyond from these and future partnerships [for LungFit PH].
• We anticipate having discussions with the FDA in calendar 2026 to identify a path forward [for NTM].
• Our program in COPD is in the preclinical stage and will move forward subject to obtaining additional financing.

Industry Context

Beyond Air operates in the competitive medical device and biopharmaceutical sectors, focusing on nitric oxide (NO) applications. Its LungFit PH system competes with established NO delivery systems, aiming to differentiate through on-demand generation from ambient air and ease of use. The company is also addressing high unmet medical needs in severe lung infections (VCAP, bronchiolitis, NTM) and neurological conditions (ASD), where current FDA-approved therapies are limited or non-existent. The oncology program with ultra-high concentration NO (UNO) targets solid tumors, a field with intense research into novel immune-oncology approaches.

Comparison to Industry Standards

• Mallinckrodt Pharmaceuticals reported NO sales of $261.4 million in 2024 (down from $303.2 million in 2023) across the United States, Canada, Japan, Mexico, and Australia, with approximately 90% in the United States. Beyond Air believes the U.S. sales potential of its LungFit PH to be approximately $350 million and worldwide sales potential to be approximately $700 million or greater, suggesting a significant market opportunity relative to existing players.
• For Viral Community-Acquired Pneumonia (VCAP), Beyond Air estimates a U.S. market potential greater than $1.5 billion and a worldwide market potential greater than $3 billion, highlighting a substantial unmet need compared to current treatments.
• In Bronchiolitis, with no currently approved treatments, Beyond Air projects a U.S. market potential greater than $500 million and a worldwide market potential greater than $1.2 billion, positioning its LungFit PRO as a potential first-in-class therapy.
• For Nontuberculous mycobacteria (NTM) lung infection, where current guideline-based approaches involve lengthy multi-drug antibiotic regimens with severe side effects, Beyond Air sees a U.S. sales potential greater than $1 billion and a worldwide potential greater than $2.5 billion, indicating a large market for a novel treatment like LungFit GO.

Corporate Governance

Legal Proceedings

• No material legal proceedings were reported for the period.

Related Party Transactions

• The Loan and Security Agreement for $11.5 million entered into on November 1, 2024, included certain lenders who are also the company's Chief Executive Officer Steven Lisi and director Robert Carey.
• On June 2, 2025, the company received $2.0 million of advanced financing from a related party, a director of the company who is also an existing lender under its Loan Agreement.
• The Amended Loan Agreement on November 3, 2025, finalized the terms of the $2.0 million Additional Loans from the related party director and included a waiver agreement where the Lender consented to the company's issuance of the Note in exchange for reducing the exercise price of the 2024 Debt Warrants.

Stakeholder Impact

• **Shareholders:** Experience reduced net losses and increased revenue, but face ongoing dilution risk from ATM offerings and warrant exercises, as well as the 'going concern' uncertainty. The stock split and option repricing also impact share structure and value.
• **Employees/Management:** Benefit from stock option repricing, which re-incentivizes them by lowering exercise prices, potentially improving morale and retention.
• **Customers (Hospitals/Medical Facilities):** Benefit from the expanded availability of LungFit PH in new international markets and the potential for new indications, offering alternative treatment options.
• **Creditors:** The company secured new debt financing and amended existing loan terms, providing some stability but also increasing overall debt obligations and royalty interests on future sales.
• **Patients:** Potential for new treatment options for PPHN, severe lung infections (VCAP, Bronchiolitis, NTM), solid tumors, and neurological conditions (ASD) as product candidates advance through clinical trials and regulatory approvals.

Next Steps

• Continue commercialization efforts for LungFit PH in the U.S. and expand into international markets through new distribution agreements.
• Progress the nNOS inhibitor program for neurological conditions from preclinical to a Phase 1 first-in-human clinical trial by the end of 2026.
• Identify a path forward for the NTM lung disease program through discussions with the FDA in calendar 2026.
• Seek additional financing to fund the paused U.S. VCAP clinical trial and advance the preclinical COPD program.
• Initiate the Phase 1b trial for Beyond Cancer's UNO + anti-PD-1 combination, with timing currently under review.
• File a registration statement by November 24, 2025, covering the resale of shares under the equity purchase agreement with Streeterville Capital LLC.

Key Dates

Recommendation

While Beyond Air has demonstrated significant operational improvements, including substantial revenue growth and reduced net losses and cash burn, the persistent 'going concern' warning and continuous need for capital raise significant red flags. The company's ability to secure multiple financing rounds post-period end is positive, but the limitations imposed by the 'baby shelf rules' on its ATM offering and the pausing of a key clinical trial due to funding highlight ongoing financial challenges. Strategic progress in product development and market expansion for LungFit PH, Beyond Cancer, and NeuroNOS are encouraging, but the execution risk remains high. A 'hold' recommendation reflects the balance between these positive developments and the inherent financial and operational risks of an early-stage biopharmaceutical company.

Keywords

Nitric Oxide, LungFit PH, PPHN, Medical Device, Biopharmaceutical, Oncology, Solid Tumors, Neuroscience, Autism Spectrum Disorder, Clinical Trials, FDA Approval, CE Mark, Capital Raise, Going Concern, XAIR